Companies Seek Relief from CAMT Impact as OBBBA Reverts R&D to First-Year Expensing

December 28, 2025 — A coalition of major corporations is pressing the Treasury Department for relief from Corporate Alternative Minimum Tax (CAMT) liabilities that have ballooned following the One Big Beautiful Bill Act's reversion to first-year expensing for research and development costs, creating what companies call an unintended interaction between two tax provisions.

The issue stems from OBBBA's restoration of immediate R&D expensing, which replaced the 15-year amortization requirement that had been in effect since 2022. While companies welcome the return to first-year write-offs for regular tax purposes, the change creates a significant problem under CAMT, which uses financial statement income as its starting point.

Under CAMT, corporations with average annual financial statement income exceeding $1 billion pay a 15% minimum tax based on adjusted financial statement income (AFSI). Because financial accounting rules generally require R&D costs to be expensed immediately, the CAMT base already reflects first-year expensing. But when regular tax required 15-year amortization, companies received a timing benefit: lower regular tax liability in early years, with the CAMT serving as a backstop.

With OBBBA's reversion to first-year expensing for regular tax, that timing benefit disappears. More critically, companies that had been amortizing R&D costs over 15 years for regular tax purposes now face a mismatch: their financial statements show immediate expensing (reflected in CAMT), while their regular tax returns may still reflect amortization for costs incurred in prior years.

A technology company with $15 billion in annual revenue reported that the interaction between CAMT and the R&D change increased its 2025 estimated tax liability by approximately $180 million. The company's tax director, who requested anonymity, said the increase stems from R&D costs that were amortized for regular tax in 2023 and 2024 but were immediately expensed for financial statement purposes, creating a permanent difference that increases AFSI.

The National Association of Manufacturers, the R&D Credit Coalition, and individual companies including major pharmaceutical and technology firms have submitted comments to Treasury requesting transitional relief. They argue that the CAMT was not designed to capture the interaction with R&D expensing changes and that companies should be allowed to adjust their CAMT calculations to account for the timing differences.

Treasury has acknowledged the issue but has not indicated whether relief will be provided. The department faces a delicate balance: providing relief could reduce CAMT revenue projections, while denying relief could create significant cash flow challenges for companies that had structured their tax planning around the prior amortization regime.

For companies in capital-intensive R&D sectors, the stakes are substantial. A pharmaceutical company reported that its CAMT liability increased from $45 million in 2024 to an estimated $320 million in 2025, primarily due to the R&D expensing change. The company has requested that Treasury allow a deduction or adjustment to AFSI for the difference between financial statement R&D expensing and the amortization that would have been required under prior law.

Tax practitioners note that the issue highlights a broader challenge with CAMT: the tax was designed to ensure large corporations pay a minimum level of tax, but interactions with other tax provisions can create outcomes that may not align with policy intent.

This article will be updated when Treasury issues guidance or proposed regulations addressing CAMT-R&D amortization interactions.